A Superior Court judge has granted the city of Sanford’s motion for default judgment in a lawsuit against the nonprofit which owns downtown’s Wilrik Hotel, but stayed the ruling until another hearing can be held to determine what remedy is appropriate in the case.

The city had filed suit against the Sanford Affordable Housing Development Corporation, a nonprofit which oversees the rental of the Wilrik’s units as low income housing, in late 2019, claiming that under the leadership of Robert Woods and Ben Gardner it had “seized” control of the building and “effectively converted (it) to private use.”

The lawsuit seeks financial damages and to return the building to city control, possibly through the reformation of the SAHDC in such a way that it would be again answerable to the Sanford Housing Authority.

City and county officials had forgiven a combined half million dollar loan on the property back in 2013 in exchange for a promise that the building’s units would eventually be renovated for use as high end condominiums after a number of years. At that time, local government apparently believed the SAHDC was a privately-controlled arm of the federally-funded Sanford Housing Authority, controlled by its members “as an organizational vehicle to hold property for affordable housing.”

But through a series of resignations and other maneuvers the city’s lawsuit said amounted to “an unfair and deceptive trade practice,” as well as the 2016 dissolution of a management contract between the SHA and the SAHDC, the nonprofit’s leadership was apparently able to gain full control of the building and eliminate any public oversight.

In the absence of a reply to the lawsuit from the SAHDC (other than a note from Gardner to the judge that he would be unable to attend a hearing in February because of a doctor’s appointment), attorneys for the city had asked for a default judgement.

That request was granted on Feb. 25, but Superior Court Judge Andrew Heath wrote in his order that he was staying the ruling until an evidentiary hearing can be held “to investigate the appropriateness of additional remedies including but not limited to the appointment of a receiver and reformation of (the SAHDC’s) bylaws.”

That evidentiary hearing is apparently scheduled for the April 13 session of civil Superior Court in Lee County, according to documents on file with the clerk of court.

Meanwhile, Woods, who left the SAHDC sometime in 2017, faces a charge of embezzling $100,000 from the nonprofit. His next court appearance is set for March 17.